Tax reform for all

“The men and women of this country who toil are the ones who bear the cost of the government...” —President Calvin Coolidge

Is our current the tax system really fair? Most of us would say “no” quite emphatically.

We always hear about bipartisan plans to make taxes “flatter,” “fairer,” “lower,” or “simpler”. That is, take money from the richest and spread it around to the neediest. But is how to ease the burden on middle-class working people who are increasingly carrying the load of our ever expanding public welfare/services state?

True, the Reagan-era tax reform was a complete rewrite of the U.S. tax code; but while it passed in 1986 with bipartisan support, it has left much to be desired in 2017. (The 1986 reform set the stage for the current Brady-Ryan tax plan.)

“Far from making the tax code simpler or fairer,” according to Dan Johnson of the libertarian Tax Revolution Institute (TRI)’s new We Do Better voluntary-tax movement, “the (1986) reform actually made the code more complicated: individual compliance costs went up immediately after it passed, and 30 years later, the code has more than doubled in size again.”

A recent e-newsletter, published by the Georgia-based TRI, provided this example to make a point about taxes and services:

When you pay your cable TV bill, you tend to think about both the inputs (how much will it cost?) and the outputs (how many channels will it deliver?). Yet, when it comes to the tax system, most people — even reformers — focus on the tax dollars inputs) in isolation, and almost never on the public services (outputs).

“People rely on the public services that taxes fund, and fundamental and sweeping tax reform is doomed to failure if that fact is not addressed,” Johnson contends.

Thus, taxes and public services are two sides of the same coin.

“The discovery that a tax revolution has to be... a public services revolution for the better provides a new way to unite conservatives and liberals around reform, which has been all too elusive because of ideological battle lines,” Johnson writes. “Providing the best public services isn’t just about spending more money doing the same things: it’s about measuring our compassion by the good that we do, and embracing the most effective way to do it.”

According to Johnson, quality public services are not available to everyone who needs them. And you shouldn’t have to be a special interest to be represented by your government.

“This is largely a result of funding many... (public services) through a coercive system,” he adds.

“Such a system eliminates accountability by guaranteeing revenue for the provider — government — even when the services fall short in quality or accessibility. The same things that make victims of the taxpayers — inefficiency, waste, complication — make victims of those who need and use the public services: one group don’t receive the services they need while the money of the other group is wasted in their provision.”

That’s why Johnson’s radical call for going around the tax system, rather than going up against it, is a truly revolutionary idea.

“We also go around ideology,” he continues, “bringing conservatives, progressives, and libertarians together toward a common goal.”

Johnson’s call to focus on the ends — the well being of the people — makes a lot of sense: let’s focus on expanding the best ways to deliver public services, which don’t involve taxation, and allow people to send their private resources to them directly.

As we embark on yet another tax reform plan, it’s good to recall the words of Martin Luther King: “True compassion is more than flinging a coin at a beggar. It comes to see that an edifice which produces beggars needs restructuring.”-